Summary "A lot of investors are still concerned about another correction."
SHANGHAI (AFP) - China s benchmark Shanghai stock index opened down 3.21 percent on Tuesday, wiping out short-lived gains from a day earlier after the government unveiled a new package of measures to boost the slumping market.
The Shanghai Composite Index dropped 121.13 points to 3,654.78. The Shenzhen Composite Index, which tracks stocks on China s second exchange, lost 3.50 percent, or 71.47 points, to 1,970.38.
On Monday, the Shanghai index rose 2.41 percent after the government over the weekend announced a halt in initial public offerings (IPOs) and moves to pour billions of yuan into the market to end three weeks of plunging prices.
But some analysts were already questioning whether current levels were sustainable following a huge run-up in Chinese shares over the past year.
"It s coming to a point where you re covering one bad policy with another," Tai Hui, Hong Kong-based chief Asia market strategist at JPMorgan Asset Management, told Bloomberg News.
"A lot of investors are still concerned about another correction."
The Shanghai market dropped almost 30 percent over the three weeks to Friday, ending a massive bull run and putting it firmly in bear territory.
On Sunday, the government said the central bank would provide funds to the state-backed China Securities Finance Co. to help "protect the stability of the securities market".
The China Securities Regulatory Commission (CSRC) also said Sunday there would be no IPOs in the near future.
China s 21 largest brokerages on Saturday said they would invest at least 120 billion yuan ($19.3 billion) in so-called "blue chip" exchange traded funds (ETFs).
"If it weren t for all of those measures, the market would have dropped even more," Yingda Securities analyst Li Daxiao told AFP.
